On May 6, 2014, the board of county commissioners adopted a resolution requesting the Miami-Dade County Mayor to produce a report analyzing the financial impact of the sale of medical marijuana (MMJ) in Miami-Dade and the South Florida area. Such request was in response to a possibility that the medical marijuana industry would come to Florida. Finally, on August 2, 2016, the County administration released the report.
What the Report contains.
The report notes that at this point the medical cannabis market is very restrictive due to limited legislation, no insurance coverage, and low number of doctors with proper certification. Under the current Compassionate Care Act and Right to Try Act, about 307,000 Florida patients may potentially qualify for medical marijuana. Notably, under these two acts only people with cancer, chronic muscle spasms, epilepsy and terminally ill patients are allowed to have access to the medicine. Hence, the number of potential patients is huge.
About 42,000 (13%) of those patients live in Miami-Dade County and about 100,000 (30%) live in the Southeast region. The authors estimate the medical marijuana market about $785 million annually under the current legislation. This number is derived from the data that on average a patient, that falls within the meaning of the current MMJ laws, spends $3,000 a year on the prescribed drugs. As such, the market in the South Florida has a potential of about $300 million annually. The market in Miami-Dade is $132 million according to the report.
Further, it addresses employment. The industry will create 102 construction related jobs with payroll of $2.24 million over the period of construction. The County anticipates 125 direct and 75 secondary jobs. These jobs will produce $11.15 million a year in pays. The authors conclude that the total financial impact on Miami-Dade County will be $61.9 million and the number will grow to $62.8 million by 2025.
This report is very pro-industry. That is a sign that Miami-Dade will be cannabis friendly county. Notably, Miami-Dade was the first county to decriminalize cannabis possession below 20 grams. Let’s analyze some parts of the report.
First, the numbers in the report do not take into consideration Amendment 2 that will be on the ballot in November. Amendment 2 has between 61% to 80% of approval rate according to the last polls. GreenAcre has no doubt the amendment will pass. These new laws will bring a number of other medical conditions that will qualify patients for medical marijuana. Some sources project that the number of potential patients will grow to 700,000. That is two fold the numbers Miami-Dade County provides. Proportionally, Miami-Dade County will have about 100,000 potential patients. South Florida will have about 230,000 potential patients.
Further, the data from other MMJ states show that on average a patient spends about $300 a month on medical marijuana. That comes to $3,600 annually for each patient to spend. As such the potential sales in the MMJ industry are around $2.5 billion in Florida and $360 million in Miami-Dade.
There is no data we can rely on to derive proper numbers of patients that will use alterative medicine (medical cannabis). The report does not explain the “realistic” number $61.9 million annual financial impact in Miami-Dade County. However, making all the subtractions from this number (construction, wages) we come to the number of $48.51 million in sales of medical marijuana. That is 36.75% of the potential industry worth ($132 million) in Miami-Dade County. In other words, the authors came to the conclusion that a third (1/3) of the potential market sales is the worth of medical marijuana industry.
By the same token, after Amendment 2 passes and the new regulations are in place, the number we are looking at in Miami-Dade County is a third of the potential market sales ($360 million), which is $120 million in sales a year. Add to this the cost of construction and services rendered by consultants, lawyers, accountants, secondary market businesses, the industry worth may go up to $150 million a year just for Miami-Dade County.
How About Reciprocity?
Further, this number is not final at all. We should not exclude the chance that Florida will provide for reciprocity that will allow the snowbirds and tourists have access to Florida MMJ program given they have valid MMJ cards from their own States. The estimate number is hard to derive, but obviously out of 100 million tourists visiting Florida a number of people will have MMJ card from their states, as the industry grows exponentially. For example, if only 3% of the tourists and snowbirds have valid MMJ cards, that would add 3 million potential patients annually. That number alone can bring almost $1 billion in sales in Florida.
Overall, the report provided by the County, although a little bit outdated, holds water. Possibly a mistake in calculations occurred when the County forecasted $1 million growth to the industry by 2025 for Miami-Dade, as this number is very low for medical marijuana industry even on the scale of a County. By year 2025, Florida will take its deserved 2 place in the US medical marijuana industry. Florida alone will likely produce $2-3 billion in sales of medical marijuana. Miami-Dade and the Southeastern region will have a big chunk of this market share.
There is not doubt that after the passage of Amendment 2, the medical marijuana industry will bring millions of dollars to the Florida economy, relief to the patients, and jobs to the community. GreenAcre’s legal and business department closely tracks all changes in the political and business aspects of medical marijuana in efforts to provide outstanding legal and consultancy advice on the regulated cannabis market.